By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Wednesday morning, with U.S. equity futures also on a downward trend. Sovereign bonds also continued a selloff as high inflation, a hawkish U.S. Federal Reserve and the war in Ukraine continue to be on investors’ radars.
Japan’s Nikkei 225 gained 0.49% by 10:37 PM ET (2:37 AM GMT). South Korea’s KOSPI was down 0.35% while in Australia, the ASX 200 was up 0.34%.
Hong Kong’s Hang Seng Index was down 0.39%. China’s Shanghai Composite fell 0.59% and the Shenzhen Component fell 0.82%. The People’s Bank of China kept its loan prime rates (LPRs) steady, with the one-year LPR at 3.7% and the five-year LPR at 4.6%.
Nasdaq 100 Futures fell about 1% following Netflix Inc.'s (NASDAQ:NFLX) slump due to lower-than-expected subscriber numbers.
The IMF cut its global growth outlook amid high inflation, Russia's invasion of Ukraine on Feb. 24, and China’s COVID-19 outbreak.
Stock and bond markets are vulnerable because the Fed and other central banks could tighten monetary policy more than anticipated to contain inflation, IMF economic counsellor Pierre-Olivier Gourinchas said in a blog post on Tuesday.
“It takes time for the market to recognize and then respond to higher inflation,” Dalton Investments LLC chairman Belita Ong told Bloomberg.
“My concern is that we benefited from low-interest rates during an era of peace, no wars, and during an era of very significant globalization. Both of those trends are now reversing.”